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Subject:  Re: Ivesting IRA funds in Dow Diamonds Date:  5/2/1998  8:29 PM
Author:  TMFPixy Number:  3143 of 88501


<<I have contributed the $2,000 max to my Roth IRA for 1997 and will be doing so for 1998. The IRA is getting 5% on a money market right now. While I'd like to put the money into the Dow Four, it seems that the commissions (I pay $12 a trade) would kill me unless I have accumulated a larger amount in the account. So, my question is, would it be a good idea to just throw the money into the Dow Diamonds stock (DIA), paying commissions once a year, until I have $10,000 or so in contributions in the account?>>

Personally, I think you're on the high side of where Fools trade, but still within the limits for trading four stocks. The first year the trades will cost you $48, or 2.4%. You'll then add $2K, so in the worst case in the second year you'll trade eight stocks for $96, or still at 2.4% or lower depending on gains in the first year. Thereafter, the costs as a percent of your total portfolio decline. Thus, my reaction is to ignore it for the first two years.


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